Facebook and Google could face crackdown in Australia

The Australian Competition and Consumer Commission published a report on Monday based on its investigation into the influence of U.S. tech giants.

It suggested taking steps such as controlling the dominance of Google’s internet services on Australian devices.

The ACCC also suggested establishing a watchdog that would oversee how the tech firms ranked and distributed news and advertising.

Jaap Arriens/NurPhoto | Getty Images

An Australian government review has suggested implementing a series of tough measures to curb the influence of U.S. tech giants.

Establishing a watchdog dedicated to regulating how Google and Facebook publish news, and preventing Google Chrome from being installed as the go-to browser on Australian devices, were among recommendations published by the Australian Competition and Consumer Commission (ACCC) on Monday.

The ACCC expressed concern in its report that tech giants were damaging Australia's traditional media outlets, as well as creating "filter bubbles" and giving credibility to less reliable news sources.

"Filter bubble" is a term referring to the intellectual isolation arising from personalised news feeds which are generated by algorithms that guess which information a user wants to see based on their personal data.

"Without adequate information and with limited choice, consumers are unable to make informed decisions, which can both harm consumers and impede competition," the report said.

The ACCC report included a proposal that would prevent Chrome, Google's internet browser, from being installed as a default browser on mobile devices, computers and tablets. It also proposed banning Google from being installed as the default search engine on other internet browsers such as Microsoft's Internet Explorer.

Another practical step proposed by the ACCC was giving a new or existing regulatory authority "the task of investigating, monitoring and reporting on how large digital platforms rank and display advertisements and news content." As well as tightening the regulation of news distribution, the ACCC recommended a "badging" system for media content shared on digital platforms, as well as incentives like tax deductions for tech companies that invested in the production of credible journalism.

It also suggested establishing a specific code of practice for digital platforms in relation to data collection. This would potentially be used to better inform consumers and "improve their bargaining power."

In a statement emailed to CNBC, a Facebook Australia spokesperson said: "We received the ACCC's preliminary report Monday, and we are currently reviewing their analysis and recommendations in more detail. As we have done over the past twelve months, we remain committed to working with the Commission as they review the contribution of all digital platforms in Australia."

A Google spokesperson told CNBC via email: "As we put forward in our submission, we develop innovative products to the benefit of consumers, businesses and the economy, and we work closely with advertisers and publishers across Australia."

"Australian law does not prohibit a business from possessing significant market power or using its efficiencies or skills to 'out compete' its rivals," ACCC Chair Rod Sims said in a statement on Monday. "But when their dominant position is at risk of creating competitive or consumer harm, governments should stay ahead of the game and act to protect consumers and businesses through regulation."

He added that the ACCC was investigating five allegations that certain digital platforms had breached Australian competition or consumer laws.